Related

Gary Barber and Roger Birnbaum will take over company’s leadership following its emergence from Chapter 11, but with reduced stake

Breaking

Updated: 4:38 p.m. PT

Metro-Goldwyn-Mayer creditors overwhelmingly passed Spyglass Entertainment's proposal to take over leadership of the company on Friday afternoon and take the debt-laden studio through a prepackaged bankruptcy, TheWrap has confirmed.

The plan received the vote of more than two thirds of MGM's debt holders.

In a statement MGM thanked the lenders and said the plan "…will dramatically reduce its debt load and put the Company in a strong position to execute its business strategy."

But in adopting the proposal, leading creditor and takeover artist Carl Icahn managed to have his cake and eat it too, according to initial reports.

He and other MGM creditors booted from the proposal Spyglass's 15-film library, which had been valued at $80 million.

That omission was a bitter blow to the Spyglass principals, Gary Barber and Roger Birnbaum. Presumably the pair will still be named co-CEOs once the Chapter 11 period closes.

They will have a tiny portion of equity in the reconfigured MGM after it emerges from bankruptcy, but nothing like the five percent that was originally envisioned in their proposal.

Furthermore, as part of the deal, the Spyglass principals agreed to consider a merger with Lionsgate in good faith.

Icahn, who has been furiously buying up notes in the studio over the past month, had initially been working to kill the plan. He had initially said that he favored a merger with Lionsgate over Spyglass' bid.

That's the deadline for creditors to vote on a pre-packaged bankruptcy plan that would see Spyglass chiefs Gary Barber and Roger Birnbaum take over the management of the studio along with a minority ownership stake.

Potentially throwing a wrench into that proposal is a last-minute merger offer from Lionsgate.

MGM executives favor the Spyglass plan over Lionsgate's, because they maintain the financing is more firm. Also, there are concerns among MGM's leadership and creditors over ongoing legal battles being waged between Lionsgate and its malcontent investor Carl Icahn.